"carbon neutral" plausibly misleading because consumers don't understand it

Dorris v. Danone Waters, 2024 WL 112843, No. 22 Civ. 8717 (NSR) (S.D.N.Y. Jan. 10, 2024)

Plaintiffs alleged that advertising Evian as “carbon neutral” violated the consumer protection statutes of New York, Massachusetts, and California, and constituted breach of express and implied warranties, unjust enrichment, and fraud. Most of the claims survived, though the NY and breach of implied warranty claims failed.

Carbon Trust "Carbon neutral" logo

 

back of bottle with logo highlighted

multipack packaging with logo highlighted

Plaintiffs alleged that consumers are willing to pay more for environmentally sustainable products. Carbon neutral” is technically defined as “having or resulting in no net addition of carbon dioxide to the atmosphere.” Plaintiffs alleged that manufacturing the products still causes CO2 release, and even if “carbon neutral” referred to offsetting emissions and complying with the Carbon Trust standard, Danone fails to disclose “how it calculates its carbon neutrality, the meaning of the Carbon Trust standard and how Defendant complies to that standard, and whether the standards themselves are ‘carbon neutral’ in that any pollution output is truly offset by other projects.”

NY: None of the plaintiffs alleged that they were deceived in New York, as required by the law.

Danone argued that (1) no reasonable consumer would understand carbon neutral to mean the Product emits no carbon dioxide; (2) Defendant accurately represented that Carbon Trust certified the Product “carbon neutral”; and (3) Plaintiffs cannot challenge the Carbon Trust certification as false or misleading. The court could not resolve these issues on a motion to dismiss.

First, Danone argued, no reasonable consumer could reasonably believe that Evian is transported from their factories in the French Alps to California and Massachusetts without emitting any carbon at all. Indeed, it continued, “(1) no carbon zero products exit, (2) the dictionary definition of ‘carbon neutral’ describes the use of offsets to balance emissions, and (3) the Product’s website explains evian® water’s approach to reducing and offsetting carbon emissions.”

The court began with Merriam-Webster’s definitions, “both of which lack specificity and may be difficult to comprehend”: carbon neutral means (1) “having or resulting in no net addition of carbon dioxide to the atmosphere” or (2) “counterbalancing the emission of carbon dioxide with carbon offsets.” The term “carbon neutral” is

more technical and scientific, unfamiliar to and easily misunderstood by the reasonable consumer. Consumers thus may reasonably become confused with the term “carbon neutral” if it has not previously been explicitly defined for them—as in, before seeing it on the Product’s label. It is plausible then that the ambiguous term “carbon neutral,” a technical word not within an average consumer’s common parlance and carrying multiple meanings, could mislead a reasonable consumer.

While “carbon neutral” “may be understood by manufacturers, distributors, and other entities within the industry, the common consumer may attach a layperson’s understanding to the term.” What reasonable consumers would think was for a factfinder.  

The FTC’s Green Guides supported this conclusion. Massachusetts Chapter 93A incorporates FTC regulations, and the Green Guides warn:

Unqualified general environmental benefit claims are difficult to interpret and likely convey a wide range of meanings. In many cases, such claims likely convey that the product, package, or service has specific and far-reaching environmental benefits and may convey that the item or service has no negative environmental impact. Because it is highly unlikely that marketers can substantiate all reasonable interpretations of these claims, marketers should not make unqualified general environmental benefit claims.

The complaint plausibly alleged that the average American consumer does not know the term’s technical definition, as “nearly sixty percent ... do not understand what the term ‘carbon neutral’ means” and that “reasonable consumers often mistake ‘carbon neutral’ for ‘carbon zero or carbon free,’ ” even if “carbon zero” products do not currently exist. As for the explanations on Danone’s website, which links to the Carbon Trust website, “[r]easonable consumers are not expected to look beyond misleading representations on the front of the container” or “to do research.” The requisite research was not “minimal,” either—“reasonable consumers should not be expected to visit two separate websites and read several pages to fully understand the meaning of ‘carbon neutral’ and ‘certified by Carbon Trust.’”

Danone argued that, if consumers don’t understand “carbon neutral,” they couldn’t be misled; the survey cited by plaintiffs showed that lots of people didn’t know exactly what it meant. “[A]lthough respondents may not understand the precise definition of the term, they could still be persuaded by the environmentally friendly sounding representation.” Indeed, such consumers “are exactly the type of consumers who would be reasonably swayed by misleading marketing practices.”